Gov’t eyes sale of 40-ha Nat’l Mental Hospital complex to raise revenues

The government is eyeing the sale of the 40-hectare property occupied by the National Mental Hospital in Mandaluyong to help raise revenues for the national budget.

The refusal by Congress to index the excise taxes to inflation or to raise the rate of the value added tax from 10 percent to 12 percent has drastically affected revenue projections from the proposed tax reform bills, forcing the Arroyo administration to look for other ways to raise revenues.

Finance Secretary Cesar V. Purisima told reporters yesterday that privatization of public properties would become a major portion of the government’s revenue-raising effort, beginning with prime properties that could be sold outright.

Purisima said he would review the inventory of government assets earlier prepared for former DoF Secretary Jose Isidro Camacho by his deputy Eric O. Recto.

"First we have to look at what we have," Purisima said. "But the NMH property alone is attractive–it’s located between two huge business districts."

Aside from the NMH property, the Arroyo government had also considered the sale of an even bigger property in Muntinlupa right beside the posh Ayala Alabang Village–the 550-hectare National Bilibid Prisons (NBP) Reservation.

Initial estimates indicated that based on the prevailing price in the adjacent Ayala Alabang Village, the NPB property could generate as much as P110 billion for the government even if sold in the prevailing property market slump.

However, the DOF said in 2002 that only about 70 percent of the property could be sold since a portion of the reservation had already been set aside by the Department of Justice (DoJ) as housing facility for its employees.

The NBP property is under the DOJ’s Bureau of Prisons and Corrections which earlier chopped off about 50 hectares from the reservation. The portion was developed into a low-cost residential subdivision and the lots were sold to DOJ employees.

However, Camacho’s plan never prospered as he ran into DOJ’s reluctance to unload the property and the more aggressive refusal of the Muntinlupa City government to give up several national shrines located in the property.

With the bulk of government’s prime assets tied up in various legal tangles, President Arroyo has ordered the immediate privatization of other unencumbered assets to shore up funds needed to reverse its debt crisis.

Located south of Alabang proper, the sprawling 550-hectare reservation has been earmarked for privatization since the 1980s but no progress has ever been made towards the sale of the property to any developer.

Cuurently housing over 15,000 inmates, prison employees and their families, the reservation is adjacent to the posh Ayala Alabang Village and has been developed to support the prisons complex, with an existing road network, golf course facilities and schools.

Aside from the maximum, medium and minimum security prison compounds, the reservation also has an elementary and high school as well as the Muntinlupa Polytechnic College owned by the city government.

When it was first lined up for privatization, the NBP reservation had attracted several groups of mostly Japanese investors who wanted to develop the property into a full golf course and recreational facility.

Should it be developed into a golf course facility now, developers said the reservation would be an ideal, if not better, and more accessible alternative to the golf courses south of Metro Manila, such as Southwoods and Canlubang Estate.